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UK tax system facing ‘havoc’ over complacent approach to IT systems UK tax system facing ‘havoc’ over complacent approach to IT systems
(about 4 hours later)
Taxpayers and the government’s finances could face “havoc” because of HM Revenue & Customs’ complacent approach to IT systems, according to parliament’s spending watchdog.Taxpayers and the government’s finances could face “havoc” because of HM Revenue & Customs’ complacent approach to IT systems, according to parliament’s spending watchdog.
The public accounts committee said the tax authority faced an “enormous challenge” in replacing the Aspire contract for maintaining its hardware and software by 2017.The public accounts committee said the tax authority faced an “enormous challenge” in replacing the Aspire contract for maintaining its hardware and software by 2017.
The government’s tax department does not currently have the skills to negotiate good value, new IT deals - and also lacks a contingency plan in case there are serious issues, the report said. The government’s tax department did not currently have the skills to negotiate good-value new IT deals, and also lacked a contingency plan in case of serious issues, the committee said.
The concerns have emerged as HM Revenue and Customs is preparing to distribute 650,000 emails to taxpayers with outstanding 2013-14 self-assessment tax returns before the 31 January filing deadline. The concerns have emerged as HMRC is preparing to distribute 650,000 emails to taxpayers with outstanding 2013-14 self-assessment tax returns before the 31 January filing deadline.
Richard Bacon, a senior committee member, said that HM Revenue and Customs’ record in managing IT contractors gave little confidence that it could change or manage a new system to collect around £500bn in taxes every year. Richard Bacon, a senior committee member, said HMRC’s record in managing IT contractors gave little confidence that it could change or manage a new system to collect around £500bn in taxes each year.
“There are substantial risks to tax collection if the transition fails, which would create havoc with the public finances. “There are substantial risks to tax collection if the transition fails, which would create havoc with the public finances, he said. “HMRC expects the new arrangements to reduce its running costs by 25%. However, the department still cannot estimate the cost of this change, in terms of moving staff, equipment and office space; it could not even provide the committee with a range.
He went on: “HMRC expects the new arrangements to reduce its running costs by 25%. However, the department still cannot estimate the cost of this change, in terms of moving staff, equipment and office space; it could not even provide the committee with a range. “We do not believe that the Cabinet Office’s red lines on IT procurement, such as its restriction on any IT contracts over £100m, are realistic in a business as large as HMRC’s, or that transformation on this scale is achievable by July 2017.”
“We do not believe that the Cabinet Office’s ‘red lines’ on IT procurement, such as its restriction on any IT contracts over £100m, are realistic in a business as large as HMRC’s, or that transformation on this scale is achievable by July 2017.” The committee said the Aspire contract with Capgemini was the government’s largest technology deal and had been expensive, costing £7.9bn over the past decade. Aspire had provided “stable systems to support the collection of taxes”, amounting to more than £500bn in 2013-14.
In its report, the committee said the Aspire contract with Capgemini was the goverment’s largest technology deal and had been expensive - costing £7.9bn over the past decade. “HMRC faces an enormous challenge in moving to a new contracting model by 2017 and appears overly complacent given the scale of the transformation required,” the report said. “Although HMRC decided three years ago to move in principle to a new contracting model it still does not have a detailed business case for the change although this was originally expected before July 2014.”
Aspire had provided “stable systems to support the collection of taxes”, amounting to over £500bn in 2013-14. The MPs highlighted difficulties in complying with new Cabinet Office rules for using a wider range of smaller-scale IT suppliers. “The end of the Aspire contract and the move to replace it with many more contracts and suppliers puts both the service HMRC provides to customers and tax collection at risk,” they said.
“HMRC faces an enormous challenge in moving to a new contracting model by 2017 and appears overly complacent given the scale of the transformation required,” the report warned. The report pointed out that problems with a previous move to centralise HMRC’s PAYE and national insurance databases had resulted in nearly £1bn of tax being foregone. “HMRC is aware of the risks involved in replacing the Aspire contract but it has not quantified them,” the MPs said.
“Although HMRC decided three years ago to move in principle to a new contracting model it still does not have a detailed business case for the change although this was originally expected before July 2014.” An HMRC spokesman said there had been “significant progress” in preparing for a smooth and effective transition from the Aspire contract.
The MPs highlighted difficulties in complying with new Cabinet Office rules for using a wider range of smaller-scale IT suppliers.
“The end of the Aspire contract and the move to replace it with many more contracts and suppliers puts both the service HMRC provides to customers and tax collection at risk,” the said.
The report pointed out that problems with a previous move to centralise HMRC’s PAYE and national insurance databases had resulted in nearly £1bn of tax being foregone.
“HMRC is aware of the risks involved in replacing the Aspire contract but it has not quantified them,” the MPs said.
An HMRC spokesman said there has been “significant progress” in preparing for a smooth and effective transition from the Aspire contract.
“The rapid development of new digital services will improve the experience of customers when they need to deal with us, making it easier for them to meet their tax and entitlements obligations, while ensuring that HMRC can fully exploit advances in digital technology to tackle tax fraud, error, evasion and avoidance,” he said.“The rapid development of new digital services will improve the experience of customers when they need to deal with us, making it easier for them to meet their tax and entitlements obligations, while ensuring that HMRC can fully exploit advances in digital technology to tackle tax fraud, error, evasion and avoidance,” he said.